Tough being best
THE Heritage Foundation has placed Hong Kong where it always knew it belonged: at the top of the list of the world's best places to do business. In the right-wing American think-tank's 1996 Index of Economic Freedom, the territory has taken the lead over its arch-rival Singapore for the title of the world's freest economy. China, by contrast, ranks along side Mauritania and the Congo as 121st and 'mostly not free'.
The index is described as a 'snapshot' not an attempt to predict future developments. Nonetheless, just as China will hope the measures it has announced to make it eligible for membership of the World Trade Organisation will improve its rating in future, Hong Kong must guard against the perception that becoming part of China in 1997 will restrict its economic freedoms. The last thing the territory wants is to narrow the gap by slipping down the economic freedoms scale, instead of encouragingChina to creep upwards.
In fact, China's latest measures, from tariff cuts to levelling the taxation for domestically and foreign owned ventures, suggest it is serious about developing its image as an open economy. However far it still has to go before either the image or the reality can be said to have improved, the time will come when China does rank quite high. But Hong Kong's position at the top will be harder to maintain. Competition is fierce. And if legislators and others persist in pushing for reforms and restrictions which tend towards greater regulation and controls, it will not be long before others join Singapore in jostling us for first place. There is often an ideological motivation to the Heritage Foundation's researches. But on economic matters, at least, it is an ideology Hong Kong has long shared. Economic freedoms and minimal regulation in every area from trade to price, wage and labour policies have formed the foundation for our success. It is an ideology we abandon at our peril.